All You Need to Know About Buying A House With A Lease Option

Lease Could Ease Your Pressure!

If you have been planning to buy a lease-to-own property, read this article that talks about the advantages and disadvantages of buying such a property.

A lease-to-own property is an attractive option as it lets you stay in the house during the lease period by paying a monthly rent. If property prices increase, you will be able to continue your stay as a tenant. On the other hand, if property prices drop, you can buy the house by negotiating with the owner. This agreement is a good option for people who would like to analyse the market and wait for some time before buying property. However, it may not be suitable for everyone.

The advantages and disadvantages of a lease-to-own property are:


No Need for Home Loan

If you enter a lease-to-own agreement, you don’t have to make a huge down payment or pay monthly interest charges. You just pay the rent amount stated in your contract till the end of the lease term. Whereas, if you plan to buy a house directly, you may apply for a home loan which comes with high interest rates.

Low Risk

Buying a home comes with monthly mortgage payments and EMIs. If you lose your job, you will be in a tight spot as you will have to repay the loan on time to avoid penalty charges or foreclosure. But, in a lease-to-own agreement, you can keep paying the monthly rent and also end the contract if you plan to switch to a house with a lower rent.


Let’s assume that you own a house in Mumbai, which is the most vulnerable real estate market in the country. The property prices in this city are dependent on the surroundings and latest infrastructural developments. If the rate for the house you have rented falls, you can always choose to stay as a tenant or move to a new house. A lease-to-own agreement doesn’t bind you to a particular property, and this provides you greater flexibility in choosing a home for yourself.


High Rent

When you enter into a lease-to-own agreement, owners will ask you to pay monthly rent and an additional amount of money, which will go towards your down payment. The latter amount depends on how much you are willing to pay. Usually, owners will charge a fair rent, but sometimes they may end up asking more rent. It means you will pay more money for that house in order to avoid paying bank interest charges incurred from a home loan.


Sometimes breaking a lease-to-own agreement may land you into legal troubles. If you wish to end the agreement, you might have to pay penalty charges or worse the owner may even drag you to court.

If you stay in a metropolitan city like Mumbai, there are many housing options at your disposal. Choose wisely and always analyse the legalities associated with any kind of property.

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